Consumer Advocates Sue Insurance Commissioner Lara For Punishing Public Participation In Prop 103 Rulemakings, Says Consumer Watchdog

Lawsuit Alleges Improper Denial of Compensation, Hostility Toward Consumer Advocacy Groups, and Biased Process

LOS ANGELES, July 30, 2025 /PRNewswire/ -- Consumer Watchdog and the Consumer Federation of California Education Foundation filed a lawsuit yesterday in Los Angeles Superior Court challenging Insurance Commissioner Ricardo Lara's denial of compensation for their participation in the regulatory process concerning two major regulations he issued last year. The nonprofit consumer groups allege that Commissioner Lara misapplied the law, retaliated against their advocacy, and commandeered control of a process that is required by law to be neutral and fair.

Download the writ petition/complaint here.

"Proposition 103 guarantees consumers the right to participate in insurance proceedings and be compensated for their contributions," said Pamela Pressley, Senior Counsel at Consumer Watchdog. "Commissioner Lara has turned that promise on its head—punishing consumer groups for opposing his policies by abusing the compensation process. That's unlawful, and it's dangerous for the integrity of insurance regulation."

"Instead of respecting the public's voice in the regulation of insurance companies' rates and practices, Commissioner Lara is trying to silence it," said Harvey Rosenfield, founder of Consumer Watchdog and author of Proposition 103. "The law doesn't allow the elected commissioner to reward loyalty and punish dissent. California voters approved Proposition 103 to give consumers a voice and the ability to stand up against the insurance industry, especially when no one else is looking out for their interests."

The lawsuit challenges the Commissioner's rejection of compensation requests submitted by both organizations after they submitted criticism and comments about two 2024 proposals by Commissioner Lara that addressed insurance rate transparency and the use of secret software to determine home insurance prices. Despite their consistent record of participation and compensation in similar proceedings, both groups were denied compensation in full. The Commissioner claimed their work did not "meaningfully influence" the outcome—applying a legal standard that has already been rejected by California courts.

The suit alleges that:

• The Commissioner imposed an unlawful "prevailing party" standard, requiring that participants sway the outcome of a proceeding to receive compensation—contrary to the statutory text, regulations, and court decisions;

• The Department ignored or excluded key contributions from the administrative record when evaluating the groups' work;

• Commissioner Lara abruptly removed neutral Administrative Law Judges from the compensation process and assigned all decisions to his own Special Counsel, compromising the impartiality required by law;

• Public statements and official documents show the Commissioner's clear bias against Consumer Watchdog and other intervenors, including claims that they act in bad faith and undermine reform efforts.

Consumer Watchdog's petition asks the court to rescind the denials, order full compensation for their work, return compensation decisions to neutral administrative law judges, and require Commissioner Lara's recusal from future compensation determinations involving the groups.

"The filing of this petition represents a line in the sand" stated Consumer Watchdog staff attorney Ryan Mellino. "For years now, this Commissioner has sought to undermine and limit the ability of intervenors to meaningfully advocate for the interests of consumers. Enough is enough. The Commissioner's unwillingness or inability to apply the law fairly and impartially demands the forceful action we have now commenced, which we look forward to prosecuting to a successful conclusion."

The case number is 25STCP02841. For more information, visit: www.consumerwatchdog.org

SOURCE Consumer Watchdog